There was no “Seinfeld” outrage over the annual Puerto Rican Day Parade this year – just confusion.

It happened at a City Council ceremony yesterday – where council Speaker Peter Vallone was unaware that one of this year’s parade themes is freeing Puerto Rican political prisoners.

Vallone was at the City Hall ceremony honoring the parade with former Councilman Ramon Velez, president of National Puerto Rican Day Parade Inc., which coordinates the yearly event.

Vallone thought the theme was fallen Puerto Rican soldiers, but Bronx Councilman Jose Rivera had sent out press releases saying the focus this year is a call for amnesty for political prisoners.

But council officials conceded privately that Vallone had no idea about Rivera’s plans – or that the focus of the parade was anything other than the 65th Infantry Division of the Puerto Rican National Guard, which fought in the Korean and Vietnam wars.

Velez later said the parade, slated for Sunday, will celebrate both themes.

Last year’s march made headlines when parade officials grew enraged over a “Seinfeld” episode in which one character accidentally sets fire to the Puerto Rican flag.

Meanwhile, Velez – who receives no salary as head of the nonprofit parade organization – said, “I haven’t touched one penny” when asked who donates money to the group, and whether it turns some of its excess funds over to charity.

The Bronx-based parade committee listed $424,957 in net assets at the end of 1998, according to income-tax returns filed with the state attorney general. The group took in $637,210 in contributions, the records show.

The group spent $325,846 on the parade – including expenditures for sound systems, music, video footage and food, the records show – about $85,000 more than it spent on the event in 1997. Velez said the excess money sits in the bank, collecting interest until the next parade. The group has no paid employees, and virtually no expenses, the records show.